published in: Swedish Economic Policy Review, 2003, 10 (2), 143-170
School quality is hard to define and measure. It is influenced by not only school expenditures,
but also characteristics that are hard to measure like norms and peer effects among teachers
and pupils. Furthermore, family background and community characteristics are important in
explaining educational outcomes. In this paper we study the composite effect of primary
schools and neighbourhoods on adult educational attainment controlling for family
characteristics. Instead of identifying the effect of specific neighbourhood and school
characteristics on educational attainment, we focus on correlations in final years of schooling
among neighbouring children and school mates. We find a clear trend of declining influence
of childhood location over the 24 year period (birth cohorts 1947-1970). Then we ask whether
a change in the compulsory school law extending the mandatory years of education, can
explain this pattern. We find some effect of the primary school reform on the change in the
neighbourhood effect. Motivated by the fact that neighbouring children typically go to the
same school, we estimate school mate correlations for children born in the 1960s. The
overall impact of factors shared by children who graduated from the same school at the age
of 15/16 is negligible. The variation in “school quality” and the impact of peers on final
educational attainment seem to have been very limited in Norway.
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